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Report of the North Carolina Utilities Commission to the Joint Legislative Utility Review Committee re: the status of telecommunications service in a changing competitive environment (pursuant to general statutes 62-2, 62-3, 62-110, and 62-133.5)

Report of the North Carolina Utilities Commission to the Joint Legislative Utility Review Committee re: the status of telecommunications service in a changing competitive environment (pursuant to general statutes 62-2, 62-3, 62-110, and 62-133.5).

THE STATUS OF TELECOMMUNICATIONS SERVICE
IN A CHANGING COMPETITIVE ENVIRONMENT
REQUIRED PURSUANT TO SECTION 6.1 OF HOUSE BILL 161
DATE DUE: OCTOBER 1, 2013
SUBMITTED: SEPTEMBER 20, 2013
RECEIVED BY
THE JOINT LEGISLATIVE
COMMISSION ON GOVERNMENTAL OPERATIONS
SUBMITTED BY
THE UTILITIES COMMISSION
State of North Carolina
Utilities Commission
COMMISSIONERS 4325 Mail Service Center COMMISSIONERS
EDWARD S. FINLEY, JR., Chairman Raleigh , N. C. 27699-4325 DON M. BAILEY
BRYAN E. BEATTY JERRY C. DOCKHAM
SUSAN W. RABON JAMES G. PATTERSON
TONOLA D. BROWN-BLAND
430 North Salisbury Street Raleigh, North Carolina 27603
Telephone: (919) 733-4249
Facsimile: (919) 733-7300
September 20, 2013
Mr. Timothy Dale
Fiscal Research Division
North Carolina General Assembly
State Legislative Office Building
Raleigh, North Carolina 27601-1030
Dear Mr. Dale:
The Utilities Commission hereby presents an electronic copy of its 2013 Report
to the Joint Legislative Commission on Governmental Operations regarding the status
of telecommunications service in a changing competitive environment.
The report is being provided pursuant to Section 6.1 of House Bill 161
(Chapter 27 of the 1995 Session Laws) requiring that “[O]n October 1, 1997, and every
two years thereafter, the Utilities Commission and the Public Staff shall each provide a
report to the Joint Legislative Utility Review Committee [now the Joint Legislative
Commission on Governmental Operations] summarizing the procedures conducted
pursuant to the provisions of this act during the preceding two years ending on July 1
immediately preceding the report date.” Section 6.1 also directs the reports to
recommend whether the provisions of House Bill 161 “should be continued, repealed, or
amended.” As noted in Part VIII of the Report, the Commission is proposing that the
General Assembly repeal Section 6.1 of House Bill 161, but recommends that all of the
other provisions of House Bill 161 remain in place, without amendment.
Thank you for your assistance.
Respectfully submitted,
Edward S. Finley, Jr.
Chairman
ESFjr/bcp
cc: Christopher Ayers, Executive Director, Public Staff
The Honorable Roy A. Cooper, Attorney General
TABLE OF CONTENTS
PART
Page
Letter of Transmittal
I. Introduction 1
II. Regulation of Incumbent Local Exchange Companies 2
III. Arbitrations and Interconnection Agreements 5
IV. Competing Local Provider Certifications 6
V. Quality of Service 6
VI. Numbering 9
VII. Intrastate Switched Access Charges 10
VIII. Recommendations 12
IX. Appendices:
Appendix A: Website Service Quality Report for the 12 Months Ended
June 30, 2013
i
1
PART I.
INTRODUCTION
On April 6, 1995, the General Assembly ratified House Bill 161 (HB 161).
Section 6.1 of HB 161 provides that:
On October 1, 1997, and every two years thereafter, the Utilities
Commission and the Public Staff shall each provide a report to the Joint
Legislative Utility Review Committee [now the Joint Legislative
Commission on Governmental Operations] summarizing the procedures
conducted pursuant to the provisions of this act during the preceding two
years ending on July 1 immediately preceding the report date. The
reports shall recommend whether the provisions of this act should be
continued, repealed, or amended.
This Report has been prepared and is being submitted in compliance with this
Section.
As with previous Reports, the North Carolina Utilities Commission (Utilities
Commission or Commission) has not confined this Report to matters arising out of North
Carolina’s HB 161 alone but has addressed certain matters arising out of federal
regulation pursuant to the Telecommunications Act of 1996 (TA96). This is necessary
in order to gain a complete perspective on the ongoing evolution in telecommunications
regulation.
It has now been more than 18 years since the passage of HB 161, and the
regulatory environment in which the Utilities Commission operates in
telecommunications has evolved considerably. In addition to intramodal landline
competition from competing local providers (CLPs), incumbent local exchange
companies (ILECs) under our jurisdiction face intermodal competition from wireless
providers, cable providers, and voice over Internet Protocol (VoIP) providers. TA96
vests in the Commission authority to conduct arbitrations with respect to disputed terms
and conditions in interconnection agreements and to approve those that have been
negotiated; but the Federal Communications Commission (FCC) is empowered to
promulgate the general framework in which those arbitrations and many other
telecommunications matters take place. Because of provisions in federal and/or state
law, the Commission does not regulate wireless service, cable television, long distance
service, or broadband service, reflecting a movement toward greater reliance on market
forces.
Finally, after submitting these telecommunications reports over the past decade
and a half, the Commission believes it is time to reconsider the usefulness of this
requirement and to consider abolishing the biennial reporting requirement as outlined in
Section 6.1. The last decade and a half have been transformative in the
telecommunications industry and there has been a corresponding transformation in the
2
kind and degree of regulation of that sector that the General Assembly has authorized.
The new model for regulation has been universally in the direction of more reliance on
market forces and less on traditional forms of regulation. This approach has generally
worked well for both providers and their customers. Accordingly, the Commission
believes that a biennial report to the General Assembly is no longer necessary. The
Commission is respectfully proposing that the General Assembly rescind Section 6.1.
PART II.
REGULATION OF INCUMBENT LOCAL EXCHANGE COMPANIES
There are currently 16 incumbent local exchange companies, or ILECs, in North
Carolina1. Each ILEC, by its choice, is regulated based on one of four different types of
regulation: (1) a price regulation plan; (2) rate-of-return; (3) Subsection (h) of
G.S. §62-133.5; or (4) Subsection (m) of G.S. §62-133.5.
Price Plan Regulation
Currently, four regulated ILECs in North Carolina operate under a
Commission-approved Price Regulation Plan, including: Barnardsville Telephone
Company (Barnardsville), Citizens Telephone Company, d/b/a Comporium
(Comporium), Saluda Mountain Telephone Company (Saluda Mountain), and Service
Telephone Company (Service).
All four Commission-approved price regulation plans contain a section which
institutes a self-enforcing penalties mechanism wherein a company’s yearly average
statewide service results must meet ten service quality objectives to avoid the
imposition of monetary penalties.
1 The Commission notes that on September 2, 2011, Randolph Telephone Company filed a
Petition for Authority to Discontinue the Provision of Service in North Carolina. Randolph Telephone
Company stated in its Petition that it was seeking authorization from the Commission to transfer all of
Randolph Telephone Company’s assets to its parent, Randolph Telephone Membership Corporation.
Randolph Telephone Company noted that, as of July 31, 2011, Randolph Telephone Company served
3,575 access lines in its only exchange located in Liberty, North Carolina. Randolph Telephone
Company affected the transfer as of December 31, 2011. Therefore, Randolph Telephone Company is
no longer an ILEC in North Carolina and is not subject to regulation by the North Carolina Utilities
Commission.
3
Further, the following chart summarizes the pricing constraints for basic local
residential and business exchange service in each of the four price regulation plans:
Company
Basic
Residential
Service
Basket
Pricing Rules For
Basic
Residential Service2
Basic Business
Service Basket
Pricing Rules For
Basic Business
Service2
Barnardsville Moderate 1.5 x inflation / 10% Moderate 1.5 x inflation / 10%
Comporium Moderate 1.5 x inflation / 10% Moderate 1.5 x inflation / 10%
Saluda Mountain Moderate 1.5 x inflation / 10% Moderate 1.5 x inflation / 10%
Service Moderate 1.5 x inflation / 10% Moderate 1.5 x inflation / 10%
Rate-of-Return Regulation
Two ILECs remain under the traditional form of rate-of-return regulation: Ellerbe
Telephone Company (Ellerbe) and Pineville Telephone Company (Pineville).
Subsection (h) Regulation
Nine ILECs have filed a notice with the Commission that they have elected to be
regulated pursuant to G.S. §62-133.5(h), also known as Subsection (h) regulation, as
follows:
● Verizon South, Inc., d/b/a Verizon North Carolina (Verizon)3 filed its
Subsection (h) notice for its Knotts Island exchange on July 21, 2010 (See
Docket No. P-19, Sub 277M).
● Frontier Communications of the Carolinas, Inc. (Frontier)3 filed its
Subsection (h) notice on January 30, 2012 (See Docket No. P-1488, Sub 1A).
● Carolina Telephone and Telegraph Company, LLC d/b/a CenturyLink
(CenturyLink) filed its Subsection (h) notice on March 8, 2012 (See Docket
No. P-7, Sub 825M).
● Central Telephone Company d/b/a CenturyLink (CenturyLink) filed its
Subsection (h) notice on March 8, 2012 (See Docket No. P-10, Sub 479N).
2 Price increases are limited annually, in the aggregate, as presented first in the chart. Price
increases for individual rate elements are limited as presented secondly in the chart.
3 On May 13, 2009, Verizon Communications Inc. (Verizon) and Frontier Communications
Corporation (Frontier) announced an agreement involving a series of transactions which resulted in the
transfer of control of substantially all of the local exchange operations of Verizon South Inc. (Verizon
South), a subsidiary of Verizon, in North Carolina to Frontier. By Commission Order dated
November 30, 2009, Frontier was designated as the ILEC for the study area of Verizon South, other than
the Knotts Island exchange. Further, Frontier was allowed to adopt the price regulation plan of Verizon
South, except as to the Knotts Island exchange.
4
● Mebtel, Inc. d/b/a CenturyLink (Mebtel) filed its Subsection (h) notice on
March 8, 2012 (See Docket No. P-35, Sub 96I).
● Windstream Concord Telephone, Inc. (Windstream Concord) filed its
Subsection (h) notice on July 26, 2012 (See Docket No. P-16, Sub 181L).
● Windstream Lexcom Communications, Inc. (Windstream Lexcom) filed its
Subsection (h) notice on July 26, 2012 (See Docket No. P-31, Sub 145C).
● Windstream North Carolina, LLC (Windstream) filed its Subsection (h) notice
on July 26, 2012 (See Docket No. P-118, Sub 86L).
● North State Telephone Company d/b/a North State Communications (North
State) filed its Subsection (h) notice on November 30, 2012 (See Docket No.
P-42, Sub 137F).
Under Subsection (h) regulation, the Commission cannot regulate the terms,
conditions, rates, or availability of a carrier’s intrastate retail services; however, the
carrier must continue to offer stand-alone basic residential lines to all customers who
choose to subscribe to that service and the rate for that service cannot increase by
more than the percentage increase for the prior year in the GDP-PI.
Additionally, the Commission maintains regulatory authority over several issues of
a Subsection (h) carrier including authority over: (1) arbitration proceedings; (2) the
rates, terms, and conditions for unbundled network elements; (3) enforcement of
interconnection agreements; (4) enforcement of federal requirements relating to
marketing activities; (5) the telecommunications relay service; (6) the Lifeline and
Link-Up4 programs; (7) universal service funds; (8) carrier of last resort obligations;
(9) the management of numbering resources; (10) switched access and intercarrier
compensation; and (11) the rates, terms, and conditions of wholesale services.
Subsection (m) Regulation
To date, only one carrier has filed a notice of election to be regulated pursuant to
G.S. §62.133.5(m), also known as Subsection (m) regulation. BellSouth
Telecommunications, Inc. d/b/a AT&T North Carolina, Inc. (AT&T North Carolina) filed
its Subsection (m) notice on October 14, 2011 (See Docket No. P-55, Sub 1013M).
AT&T North Carolina had previously filed a Subsection (h) notice on October 5, 2009
(See Docket No. P-55, Sub 1013M) and was regulated as a Subsection (h) carrier
between October 5, 2009 and October 13, 2011.
4 Effective April 2, 2012, the FCC eliminated the Link-Up program except for consumers located
on tribal lands.
5
Below is a summary of the current regulatory status of the 16 ILECs in the State:
Company Name Type of Regulation Docket Number
AT&T North Carolina Subsection (m) P-55, Sub 1013M
Barnardsville Price Regulation Plan P-75, Sub 63
Centurylink (Carolina) Subsection (h) P-7, Sub 825M
Centurylink (Central) Subsection (h) P-10, Sub 479N
Comporium Price Regulation Plan P-12, Sub 111
Windstream Concord Subsection (h) P-16, Sub 181L
Ellerbe Rate-of-Return Not Applicable
Frontier Subsection (h) P-1488, Sub 1A
Windstream Lexcom Subsection (h) P-31, Sub 145C
Mebtel Subsection (h) P-35, Sub 96I
North State Subsection (h) P-42, Sub 137F
Pineville Rate-of-Return Not Applicable
Saluda Mountain Price Regulation Plan P-76, Sub 53
Service Price Regulation Plan P-60, Sub 73
Verizon (Knotts Island) Subsection (h) P-19, Sub 277M
Windstream Subsection (h) P-118, Sub 86L
PART III.
ARBITRATIONS AND INTERCONNECTION AGREEMENTS
G.S. §62-110(f1), in pertinent part, authorizes the Utilities Commission to adopt
rules it finds necessary as follows:
(1) To provide for the reasonable interconnection of facilities between all
providers of telecommunications services;
(2) To determine, when necessary, the rates for such interconnection;
(3) To provide for the reasonable unbundling of essential facilities where
technically and economically feasible; and
(4) To provide for the transfer of telephone numbers between providers in a
manner that is technically and economically reasonable.
In addition, Section 251 of TA96 establishes various duties related to
interconnection. Section 252 sets out the process for the approval of negotiated
interconnection agreements and arbitrations for disputed interconnection agreements.
Since 1996, the following negotiation and arbitration results have been achieved:
 1,342 negotiated interconnection agreements between companies have
been approved by the Commission as of July 31, 2013 (not including
amendments to existing interconnection agreements); and
6
● 31 petitions for arbitration have been decided by the Commission with the
issuance of a Recommended Arbitration Order.
PART IV.
COMPETING LOCAL PROVIDER CERTIFICATIONS
On July 19, 1995, the Utilities Commission issued an Order in Docket No. P-100,
Sub 133 promulgating interim rules for certification and regulation of competing local
providers (CLPs) and posing questions for comments on the appropriate regulatory
structure for CLPs, resale of local service, and interconnection. After a round of
comments and reply comments from interested parties, the Commission adopted a
revised and expanded set of provisions as Commission Rules R17-1 through R17-5, on
February 23, 1996. These rules establish the basis on which CLPs are regulated.
These include a detailed list of items to be considered in the application of a prospective
provider for local exchange and exchange access authority and specific requirements
on such things as billing and customer notice.
The Commission has since streamlined the certification process. During the
certification process, the Public Staff analyzes the application to determine and assure
that the applicant is qualified to provide service to the public and that it demonstrates an
understanding of the provisions contained in Commission Rules R17-1 through R17-8.
When the application has been sufficiently perfected, the Public Staff will so advise the
Commission and the Commission will generally issue a certificate without a hearing.
However, the Commission retains the option to hold a hearing should the application
raise concerns which may adversely affect the public interest.
As of July 1, 2013, there were 174 certified CLPs. Further, based on data
published in March 2011 by the FCC5, CLPs served 1,324,0006 switched access lines in
the state as of June 30, 2010. As of that same date, ILECs served 2,850,160 access
lines in the state.
PART V.
QUALITY OF SERVICE
A. Service Quality Standards – Retail
Docket No. P-100, Sub 99
5 The March 2011 Report is the most recent Local Competition Report released by the FCC.
6 176,000 lines were provided via resale, 201,000 lines were provided via unbundled network
elements, 126,000 lines were provided via CLP-owned local loops, and 821,000 lines were provided via
VoIP subscriptions.
7
Commission Rule R9-8: Companies are required to file quarterly reports with the
Commission which detail monthly results on certain service quality measures as
outlined in Commission Rule R9-8.
Subsection (h) ILECs and CLPs and Subsection (m) ILECs and CLPs are not required
to adhere to Rule R9-8.
Website Posting of Service Quality Results: On June 3, 2005, the Commission
ordered website posting on the Commission’s website of service quality results which
are updated quarterly and reflect a 12-month average of results. The results for each
specific service quality measure are presented in a pass/fail format. The current report,
reflecting the 12 months ended June 30, 2013, can be found at
www.ncuc.net/consumer/svcqlty.pdf. A copy of the most current report is attached
hereto as Appendix A.
B. Service Quality Standards – Wholesale
Docket No. P-100, Sub 133k
The Commission has adopted service quality measurement plans for AT&T North
Carolina, Carolina, Central, and Frontier7 (formerly Verizon South, Inc.) to respond to
the enactment of TA96 which required ILECs to provide nondiscriminatory wholesale
access to CLPs and their retail customers.
Frontier, Carolina, and Central continue to operate under a stipulated interim
performance measurement plan approved by the Commission on April 13, 2000.
The Commission originally adopted a Service Quality Measurements (SQM) Plan
and Self-Effectuating Enforcement Mechanism (SEEM) Plan effective August 1, 2003
for AT&T North Carolina. In 2005, AT&T North Carolina and a group of CLPs filed a
new, stipulated SQM and SEEM Plans for AT&T North Carolina. The Commission
approved the stipulation by Order dated October 24, 2005. AT&T North Carolina’s new
SQM and SEEM Plans became effective on January 1, 2006.
Further, AT&T North Carolina has implemented various new interfaces and
system changes in recent years which have necessitated updates to the SQM and
SEEM Plans. These updates have been reflected in revised versions of the SQM and
SEEM Plans with effective dates of: July 18, 2009; November 14, 2009; April 15, 2010;
July 3, 2010; and September 1, 2012.
7 Per Ordering Paragraph No. 7 of the Commission’s November 30, 2009 Order Granting
Certificates and Approving Requests (Docket Nos. P-1488, Subs 0 and 1; P-1489, Sub 1; P-100,
Subs 133c and 133k; P-19, Subs 277 and 537; P-574, Sub 2; and P-517, Sub 2), Frontier “. . .shall adopt
the Performance Measures in effect for Verizon South, pursuant to the April 13, 2000, Order in Docket
No. P-100, Sub 133k, and any subsequent orders for the existing Verizon South study area, other than
the Knotts Island exchange (Docket Nos. P-1488, Sub 1, and P-100, Sub 133k).”
8
On August 31, 2010, AT&T North Carolina filed a Motion to Approve
Modifications to its SQM/SEEM Plans. AT&T North Carolina noted that the proposed
changes would streamline the SQM/SEEM Plans and that AT&T North Carolina was
seeking approval of the proposed SQM/SEEM Plans throughout AT&T’s nine-state
southeast region. The proposed changes to the SQM/SEEM Plans included the
following:
(1) elimination of Tier 2 remedies paid by AT&T North Carolina to the State of
North Carolina;
(2) increases to Tier 1 remedies paid by AT&T North Carolina to CLPs;
(3) other SEEM Plan changes to eliminate several provisions that impose
penalties on performance for activities that have no impact on the level of
service provided to the CLP; and
(4) miscellaneous changes including modifications, additions, and deletions to
the Plans.
The Commission sought comments from interested parties on AT&T North
Carolina’s Motion. By Order dated October 22, 2010, the Commission granted AT&T
North Carolina’s Motion in its entirety. AT&T North Carolina’s modified SQM/SEEM
Plans were effective on January 1, 2011.
In addition, AT&T North Carolina has invoked the force majeure provision of its
SEEM Plan three times in the past few years. Under AT&T North Carolina’s SEEM
Plan, AT&T North Carolina must file a notice of its intent to invoke the force majeure
provision of its SEEM Plan. Competing local providers have ten days to file objections
or concerns on the notice filing. The notice of force majeure is deemed approved by the
Commission effective 30 calendar days after AT&T North Carolina provides the notice.
AT&T North Carolina has filed notices of force majeure for the following time periods:
January 10, 2011 through January 16, 2011; April 17, 2011 through April 30, 2011; and
August 26, 2011 through September 9, 2011. No objections were filed on any of the
notices and all of the notices were deemed approved by the Commission after the
30 days expired.
Finally, it should be noted that, although AT&T North Carolina is a
Subsection (m) company as discussed in Part II of this Report, the Commission
continues to have regulatory authority over the wholesale services provided by AT&T
North Carolina to CLPs.
9
PART VI.
NUMBERING
919/984 Area Code
On March 31, 2012, the 984 area code was placed in-service to meet the
demand for telephone numbering resources for the existing 919 area code located in
and around Raleigh. The 984 area code is the second all-services distributed overlay
approved by the Commission for implementation in the State. The first overlay relief
was the 980 area code implemented in the Charlotte area in 2001. The chief
disadvantage of implementing an all-services distributed overlay is the requirement of
10 digit dialing for local calls.
After the successful implementation of the 984 area code, numerous misdials
occurred when customers dialed 911 rather than 919 when making local calls. The
misdialed calls resulted in numerous follow-up calls from area 911 Public Safety
Answering Point (PSAP) centers to verify if an emergency call had been placed
requiring assistance. The Commission, as well as service providers, responded to the
general public through press releases asking telephone users to remain on the line if
they dialed 911 in error while attempting to complete a local call.
336 Area Code
The 336 area code, which generally provides coverage for the Greensboro -
Winston-Salem - High Point area, is currently projected to exhaust in the second quarter
of 2016.
In 2000, Neustar, in its role as the North American Numbering Plan Administrator
(NANPA), filed a petition requesting that the Commission approve the Industry’s
recommended all-services distributed overlay for relief of the 336 area code. At the
time Neustar filed the petition, the 336 area code was projected to exhaust by the fourth
quarter of 2002. However, with the implementation of Thousands Block Number
Pooling and other conservation measures, the relief planning was suspended. Neustar
has recently notified the Commission that the 336 area code is currently projected to
exhaust in the second quarter of 2016. The 2000 petition is pending before the
Commission.
Requests for “Safety Valve” Relief
In the FCC’s Third Report and Order and Second Order On Reconsideration in
CC Docket No. 96-98 and Docket No. 99-200, issued on December 28, 2001, the FCC
delegated authority to state commissions to hear claims that a “safety valve” should be
applied when the NANPA or Pooling Administrator (PA) denies a carrier’s specific
request for numbering resources. FCC rules state that a service provider must be
within six months of exhaust of its numbering resources and have achieved a
10
75 percent utilization of its numbering resources in a specified market area (i.e., rate
center) before Neustar may grant additional numbering resources. Under the “safety
valve” mechanism, a carrier may file a petition with the Commission requesting that the
Commission overturn Neustar’s denial of numbering resources. The Commission has
granted numbering resources through “safety valve” relief 33 times during the past two
years. Generally, the demand for “safety valve” relief is driven by a business client’s
internal telecommunications network or special numbering resources formatting
requirements.
The deployment of packet switching technology by service providers represents
a new dimension of “safety valve” relief. Service providers must establish a Local
Routing Number (LRN) for each new packet switch which is specific to a particular
location for identification within the North American Numbering Plan for call initialization
and completion between customers. The FCC’s December 28, 2001 Order also
delegated authority to state commissions to review Neustar denials for LRNs, as
necessary. Frontier Communications of the Carolinas, Inc., Windstream Concord, and
Windstream North Carolina, LLC have filed petitions with the Commission for additional
numbering resources in instances where Neustar has denied requests for LRNs. The
Commission has granted each of these petitions. The growing use of packet switching,
which is driven by various broadband deployment initiatives, will increase demand for
numbering resources across the State.
PART VII.
INTRASTATE SWITCHED ACCESS CHARGES
A long distance provider must pay a local exchange company (LEC) intrastate
switched access charges to transport the portion of an intrastate long distance call that
begins or terminates on the LEC’s facilities. On November 23, 2009, Sprint
Communications Company, L.P., Sprint Spectrum, L.P., and Nextel South Corp.
(collectively Sprint) filed a Petition to Reduce Switched Access Rates charged by local
exchange companies in North Carolina on an intrastate basis, arguing that those rates
are too high and should be reduced. The Commission solicited comments on Sprint’s
Petition in Docket No. P-100, Sub 167 (the Access Charge Reform Docket) from
interested parties and, on April 14, 2010, established an Access Charges Working
Group (ACWG) made up of interested companies and the Public Staff to further
examine in greater detail the issues involved in intrastate access charge reform,
including the impact on universal service funding. Switched access charges have
traditionally provided an implicit subsidy used by carriers to ensure universal service.
The ACWG Report revealed widely divergent views on whether switched access
charges should be reformed and, if so, how access charges should be amended. The
parties to the ACWG suggested that the Commission schedule an evidentiary hearing.
The Commission agreed, and, on June 3, 2011, scheduled a hearing to begin on
October 18, 2011. The hearing began as scheduled.
11
On November 18, 2011, the FCC released its Report and Order and Further
Notice of Proposed Rulemaking (FCC 11-161, WC Docket No. 10-90) which is known
as the Universal Service Fund (USF) / Intercarrier Compensation (ICC) Transformation
Order. The USF/ICC Transformation Order provides a comprehensive, uniform, national
bill-and-keep framework as the ultimate end state for all telecommunications traffic
exchanged with a LEC.
By Order dated December 7, 2011, the Commission requested that the parties
file initial and reply comments on the impact of the FCC’s USF/ICC Transformation
Order on the Access Charge Reform Docket.
Initial comments were filed on March 15, 2012 by AT&T North Carolina and the
North Carolina Telephone Membership Corporations (TMCs)8, the Competitive Carriers
of the South Inc. (CompSouth) and the North Carolina Cable Telecommunications
Association (NCCTA), the ILEC Group9, the Public Staff, Sprint, and MCImetro Access
Transmission Services, LLC d/b/a Verizon Access Transmission Services, MCI
Communications Services, Inc. d/b/a Verizon Business Services and Cellco Partnership
and Verizon Wireless (Verizon).
Reply comments were filed on April 16, 2012 by AT&T North Carolina and the
North Carolina TMCs, CompSouth and the NCCTA, the ILEC Group, Sprint, and
Verizon.
On July 10, 2012, the Commission issued its Order Holding Docket in Abeyance
Pending Further Commission Order. In its Order, the Commission concluded it was
appropriate to hold the proceeding in abeyance pending action by the FCC on the
Further Notice of Proposed Rulemaking, the outcome of various Federal Court appeals,
and the decisions on reconsideration requests before the FCC. The Commission
asserted that by holding the docket open, the Commission could safeguard the valuable
and extensive evidentiary record already compiled in the docket for possible later use.
The Commission further concluded that it was premature to take any action on
the issue of originating intrastate access charges at that point in time. The Commission
stated that it would continue to monitor the myriad of pending issues stemming from the
FCC’s USF/ICC Transformation Order including motions for reconsideration before the
8 The TMCs include Atlantic Telephone Membership Corporation, Randolph Telephone
Membership Corporation, Skyline Telephone Membership Corporation, Star Telephone Membership
Corporation, Surry Telephone Membership Corporation, Tri-County Telephone Membership Corporation,
Wilkes Telephone Membership Corporation, and The Yadkin Valley Telephone Membership Corporation.
9 For purposes of the comments, the ILEC Group included Citizens Telephone Company d/b/a
Comporium, Ellerbe Telephone Company, North State Telephone Company d/b/a North State
Communications, Barnardsville Telephone Company, Saluda Mountain Telephone Company, Service
Telephone Company, Town of Pineville d/b/a Pineville Telephone Company, Frontier Communications of
the Carolinas, Inc., Carolina Telephone and Telegraph Company, LLC d/b/a CenturyLink, Central
Telephone Company d/b/a CenturyLink, MebTel, Inc. d/b/a CenturyLink, Windstream Concord
Telephone, Inc., Windstream Lexcom Communications, Inc., and Windstream North Carolina, LLC.
12
FCC, the federal court cases, and the FCC’s decision resulting from the Further Notice
of Proposed Rulemaking.
The Commission concluded that it would continue to monitor the FCC’s actions
on the issue of the appropriate transition for originating intrastate access charges to the
bill-and-keep pricing methodology and would initiate, either on its own accord or in
response to a motion, any further proceedings or actions necessary once the FCC
released its decision on the issue. In addition, there are several cases pending in the
federal courts on the USF/ICC Transformation Order and pending motions for
reconsideration before the FCC. Resolution of these outstanding appeals and motions
may require further action by the Commission in the docket.
PART VIII.
RECOMMENDATIONS
Section 6.1 of HB 161 requests the Utilities Commission to recommend in each
of its Reports “whether the provisions of this act should be continued, repealed, or
amended.” The Utilities Commission recommends that all of the provisions of House
Bill 161 with the exception of Section 6.1 continue without amendment.
However, as noted in the Introduction, the Commission respectfully proposes that
the General Assembly repeal Section 6.1 of HB 161 so that the Commission will no
longer be required to submit a biennial report concerning telecommunications to the
Joint Legislative Commission on Governmental Operations.
PART IX.
APPENDICES
Appendix A: Website Service Quality Report for the 12 Months Ended
June 30, 2013
APPENDIX A
PAGE 1 of 6
Operator
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Initial
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Out-of -Service
Troubles
Cleared w ithin
24 Hours
Regular Service
Orders Completed
w ithin 5 Working
Days
New Service
Installation
Appointments Not Met
for Company Reasons
New Service
Held Orders Not
Completed w ithin
30 Days
@ Communications, Inc. N/A N/A ✔ ✔ N/A N/A N/A N/A N/A
Access Point, Inc. DNR DNR ✘ ✘ N/A N/A N/A N/A N/A
ACN Communications Services, Inc. N/A N/A ✘ ✘ N/A ✘ N/A N/A N/A
Airspring, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
All American Telecom, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Alternative Phone, Inc. N/A N/A ✔ ✔ ✔ N/A ✔ ✔ ✔
Atlantic Telecom Multi. Con., LLC N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
Barnardsville Telephone Company N/A N/A ✔ ✘ ✔ ✔ ✔ ✔ ✔
BCN Telecom, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Big River Telephone Company, LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
Birch Communications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Birch Telecom of the South, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Broadvox-CLEC <12 <12 <12 <12 <12 <12 <12 <12 <12
Budget PrePay, Inc. N/A N/A N/A N/A DNR DNR DNR ✔ ✔
BullsEye Telecom, Inc. DNR DNR ✔ ✔ ✔ DNR DNR DNR DNR
Business Telecom, Inc. ✔ ✔ ✘ ✘ N/A N/A ✘ N/A N/A
Capital Communications Consultants, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Cebridge Telecom NC, LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
Charter Fiberlink NC - CCO, LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
Cincinnati Bell Any Distance, Inc. N/A N/A N/A N/A N/A N/A N/A N/A N/A
Citizens Telephone Company N/A N/A ✔ ✔ ✔ ✘ ✔ ✔ ✔
Common Point, LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
ComTech21, LLC N/A N/A DNR DNR ✔ ✔ ✔ ✔ ✔
Crown Castle NG East, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Cypress Comm. Operating Co., LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
DeltaCom, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Dialog Telecommunications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Ellerbe Telephone Company N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
KEY TO SYMBOLS USED IN THIS TABLE
✔ The company's average statewide performance met the objective during the report period. <12 Results were reported for fewer than 12 months; however, no waiver was requested from
✘ The company's average statewide performance failed to meet the objective during the report period. the Commissio n.
N/A The company reported that the results for this objective were not within its control. This typically means that DNR The reported data for this objective for one or more months were inconsistent with Rule R9-8
another company provided the associated service. and Commissio n orders in Docket No. P-100, Sub 99, rendering the data unusable.
<12
<12
<12
✔
✔
<12
DNR
N/A
<12
<12
N/A
<12
Service Quality Report
Period Covered: July 1, 2012 - June 30, 2013
REPORTING
COMPANY
ANSWERTIMES TROUBLE REPORTS, SERVICE ORDERS, AND CUSTOMER APPOINTMENTS
Repeat
Customer
Trouble
Reports
✔
<12
N/A
<12
<12
<12
N/A
✔
✔
N/A
<12
<12
DNR
✔
<12
<12
APPENDIX A
PAGE 2 of 6
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Cleared w ithin
24 Hours
Regular Service
Orders Completed
w ithin 5 Working
Days
New Service
Installation
Appointments Not Met
for Company Reasons
New Service
Held Orders Not
Completed w ithin
30 Days
Entelegent Solutions, Inc. N/A N/A ✔ ✔ N/A N/A N/A N/A N/A
Ernest Communications, Inc. ✔ ✔ ✔ ✔ ✔ ✘ ✔ ✔ ✔
EveryCall Communications, Inc. N/A N/A ✔ ✔ ✔ N/A N/A ✔ ✔
Fast Phones, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Fidelity Comm. Services III, Inc. N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
Flatel, Inc. N/A N/A ✔ ✔ N/A N/A N/A N/A N/A
France Telecom Corp. Solutions L.L.C. N/A N/A N/A N/A N/A N/A N/A N/A N/A
FRC, LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
Global Connection, Inc. of America N/A N/A ✘ ✘ ✔ ✔ ✔ N/A N/A
Global Crossing Local Services, Inc. N/A N/A ✘ ✘ ✔ DNR N/A N/A N/A
Granite Telecommunications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
IDT America, Corp. <12 <12 <12 <12 <12 <12 <12 <12 <12
Image Access, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
iNETWORKS Group, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Infotelecom, LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
Interlink Telecommunications, Inc. N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
Legacy Long Distance International, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Lightyear Network Solutions, LLC ✔ ✔ ✔ ✔ ✔ N/A N/A N/A N/A
Linkup Telecom, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
LTS of Rocky Mount, LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
Matrix Telecom, Inc. N/A N/A DNR DNR ✔ ✘ DNR ✔ ✔
MCC Telephony of the South <12 <12 <12 <12 <12 <12 <12 <12 <12
McGraw Communications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
MCImetro Access Trans. Services, LLC ✘ ✘ ✘ ✔ N/A N/A N/A N/A N/A
Metropolitan Tel. of N. C., Inc. N/A N/A ✔ ✔ N/A N/A N/A N/A N/A
Mitel NetSolutions, Inc. N/A N/A N/A N/A ✔ DNR DNR ✔ ✔
Mobilitie, LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
Momentum Telecom, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
KEY TO SYMBOLS The company 'Us SaEveDr aIgNe TstHaIteSw TidAeB pLeErformance met the objective during the report period.
✔ The company's average statewide performance failed to meet the objective during the report period. <12 Results were reported for fewer than 12 months; however, no waiver was requested from
✘ The company reported that the results for this objective were not within its control. This typically means that
the Commissio n.
N/A another company provided the associated service. DNR The reported data for this objective for one or more months were inconsistent with Rule R9-8
and Commissio n orders in Docket No. P-100, Sub 99, rendering the data unusable.
<12
<12
<12
<12
N/A
✔
<12
<12
✔
<12
Service Quality Report
Period Covered: July 1, 2012 - June 30, 2013
✔
REPORTING
COMPANY
ANSWERTIMES TROUBLE REPORTS, SERVICE ORDERS, AND CUSTOMER APPOINTMENTS
Repeat
Customer
Trouble
Reports
N/A
<12
✔
<12
N/A
✔
✔
<12
<12
<12
N/A
✔
N/A
✔
<12
✔
<12
APPENDIX A
PAGE 3 of 6
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Cleared w ithin
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Regular Service
Orders Completed
w ithin 5 Working
Days
New Service
Installation
Appointments Not Met
for Company Reasons
New Service
Held Orders Not
Completed w ithin
30 Days
NET TALK.com, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
New East Telephony, Inc. N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
New Horizons Communications, Corp. <12 <12 <12 <12 <12 <12 <12 <12 <12
NOS Communications, Inc. ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
One Voice Communications, Inc. ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
OneTone Telecom, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
PaeTec Communications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Piedmont Communications Services, Inc. N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
Pineville Telephone Company N/A N/A ✔ ✔ DNR ✔ ✔ ✔ ✔
PNG Telecommunications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Preferred Long Distance, Inc. N/A N/A ✔ ✔ ✔ ✔ ✘ ✔ ✔
QuantumShift Communications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Ready Telecom, Inc. N/A N/A ✔ ✔ N/A N/A N/A N/A ✔
Saluda Mountain Telephone Company N/A N/A ✔ ✘ ✘ ✔ ✔ ✔ ✔
School Link, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Service Telephone Company N/A N/A ✔ ✘ ✔ ✔ ✘ ✔ ✔
SkyBest Communications, Inc. N/A N/A ✔ ✘ ✔ ✔ ✘ ✔ ✔
South Carolina Net, Inc. N/A N/A N/A ✔ ✔ ✔ DNR ✔ ✔
Spectrotel, Inc. ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
Springboard Telecom, Inc. N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
Talk America, Inc. N/A N/A ✔ ✔ ✔ N/A N/A N/A N/A
TDPC, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Telco Experts, Inc. ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
TelCove Operations, Inc. ✔ ✔ ✔ ✔ N/A ✔ DNR N/A N/A
Tele Circuit Network Corporation ✔ ✔ ✔ ✔ N/A N/A N/A N/A N/A
Teledias Communications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
The Other Phone Company N/A N/A ✔ ✔ ✔ N/A N/A N/A N/A
Town of Pineville N/A N/A ✔ ✔ DNR ✔ ✔ ✔ ✔
KEY TO SYMBOLS USED IN THIS TABLE
✔ The company's average statewide performance met the objective during the report period. <12 Results were reported for fewer than 12 months; however, no waiver was requested from
✘ The company's average statewide performance failed to meet the objective during the report period. the Commissio n.
N/A The company reported that the results for this objective were not within its control. This typically means that DNR The reported data for this objective for one or more months were inconsistent with Rule R9-8
another company provided the associated service. and Commissio n orders in Docket No. P-100, Sub 99, rendering the data unusable.
✔
✔
<12
N/A
<12
✔
<12
✔
<12
✔
Service Quality Report
Period Covered: July 1, 2012 - June 30, 2013
REPORTING
COMPANY
ANSWERTIMES TROUBLE REPORTS, SERVICE ORDERS, AND CUSTOMER APPOINTMENTS
Repeat
Customer
Trouble
Reports
<12
✔
✔
✔
✔
<12
<12
✔
✔
✔
✔
<12
✔
DNR
<12
✔
N/A
N/A
APPENDIX A
PAGE 4 of 6
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Regular Service
Orders Completed
w ithin 5 Working
Days
New Service
Installation
Appointments Not Met
for Company Reasons
New Service
Held Orders Not
Completed w ithin
30 Days
Trans National Comm. Int., Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
UNICOM Communications, LLC N/A N/A ✔ N/A ✔ ✔ ✔ ✔ ✔
Unity Telecom, LLC ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
US LEC of North Carolina, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Velocity The Greatest Phone Company Ever, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Victory Communications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Wave Telecom, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Wilkes Communications, Inc. N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
WiMacTel, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Windstream Communications, Inc. ✔ ✔ DNR DNR ✔ ✘ ✔ ✔ ✔
Windstream Nuvox, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
XO Communications Services, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Yadkin Valley Telecom, Inc. N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
KEY TO SYMBOLS USED IN THIS TABLE
✔ The company's average statewide performance met the objective during the report period. <12 Results were reported for fewer than 12 months; however, no waiver was requested from
✘ The company's average statewide performance failed to meet the objective during the report period. the Commissio n.
N/A The company reported that the results for this objective were not within its control. This typically means that DNR The reported data for this objective for one or more months were inconsistent with Rule R9-8
another company provided the associated service. and Commissio n orders in Docket No. P-100, Sub 99, rendering the data unusable.
<12
<12
✔
✔
✔
<12
<12
✔
<12
<12
<12
<12
✔
Service Quality Report
Period Covered: July 1, 2012 - June 30, 2013
REPORTING
COMPANY
ANSWERTIMES TROUBLE REPORTS, SERVICE ORDERS, AND CUSTOMER APPOINTMENTS
Repeat
Customer
Trouble
Reports
APPENDIX A
PAGE 5 of 6
Access Communications, Inc. G C Pivotal, LLC Reliance Globalcom Services, Inc.
Access Fiber Group, Inc. Hotwire Communications, Ltd. RidgeLink, LLC
ALEC, Inc. Hypercube Telecom, LLC Sage Telecom Communications, LLC
ATC Outdoor DAS, LLC inContact d/b/a UCN Sage Telecom, Inc.
BalsamWest FiberNET, LLC IntelePeer, Inc. SCANA communications, Inc.
Bandwidth.com CLEC, LLC Intelletrace, Inc. Sprint Communications Company, L.P.
BellSouth Long Distance, Inc. Intellicall Operator Services, Inc. Star Wireless, Inc.
Better World Telecom, LLC Intellifiber Networks, Inc. Sunesys, LLC
Broadplex, LLC Intrado Communications, Inc. Sungard Network Solutions, Inc.
Broadview Networks, Inc. IPC Network Services, Inc. Synergem Technologies, Inc.
BT Communications Sales LLC Level 3 Communications, L.L.C. Time Warner Cable Information Services (N. C.), LLC
Buggs Island Telephone Cooperative LMK Communications, LLC Touchtone Communcations Inc.
Cbeyond Communications, LLC MegaPath Corporation tw telecom of north carolina l.p.
Celito CLEC, LLC Network Innovations, Inc. Verizon Select Services, Inc.
CND Acquisition Corporation Network Telephone Corporation Wholesale Carrier Services, Inc.
Cox North Carolina Telecom, LLC Neutral Tandem - North Carolina, LLC Windstream KDL, Inc.
Crexendo Business Solutions, Inc. NextGen Communications, Inc. Windstream Norlight, Inc.
Custom Teleconnect, Inc. Nexus Communications, Inc. Windstream NTI, Inc.
DukeNet Communications, LLC North American Local, LLC Ymax Communications Corp.
EarthLink Business, LLC Peerless Network of North Carolina, LLC Zayo Group, LLC
ExteNet Systems, Inc. Port City Multimedia, Inc.
Fiber Technologies Networks, L.L.C. Randolph Telephone Telecommunications, Inc.
The following companies filed letters stating that they either did not provide service in North Carolina or did
not provide basic local residential and/or business exchange service to customers in North Carolina during the
period covered by this report.
APPENDIX A
PAGE 6 of 6
The following companies have not filed a service quality report.
365 Wireless, LLC PhoneAid Communications Corp.
ANPI Business, LLC Sidera Networks, LLC
O1 Communications East, LLC South Carolina Telecommunications Group Holdings LLC
The following companies have opted into Subsection H regulation.
Carolina Telephone and Telegraph Company Rosebud Telephone, LLC
Central Telephone Company Smithville Telecom, LLC
DishNet Wireline, LLC Verizon South, Inc.
Frontier Communications of America, Inc. Windstream Concord Telephone, Inc.
Frontier Communications of the Carolinas, Inc. Windstream Lexcom Communications, Inc.
MebTel, Inc. Windstream North Carolina, LLC
North State Telephone Company
The following companies have opted into Subsection M regulation.
AT&T Corp. Madison River Communications, LLC
BellSouth Telecommunications, LLC North State Communications Advanced Services, LLC
Crosstel Tandem, Inc. Qwest Communications Company, LLC
Embarq Communications, Inc. Teleport Communications America, LLC

THE STATUS OF TELECOMMUNICATIONS SERVICE
IN A CHANGING COMPETITIVE ENVIRONMENT
REQUIRED PURSUANT TO SECTION 6.1 OF HOUSE BILL 161
DATE DUE: OCTOBER 1, 2013
SUBMITTED: SEPTEMBER 20, 2013
RECEIVED BY
THE JOINT LEGISLATIVE
COMMISSION ON GOVERNMENTAL OPERATIONS
SUBMITTED BY
THE UTILITIES COMMISSION
State of North Carolina
Utilities Commission
COMMISSIONERS 4325 Mail Service Center COMMISSIONERS
EDWARD S. FINLEY, JR., Chairman Raleigh , N. C. 27699-4325 DON M. BAILEY
BRYAN E. BEATTY JERRY C. DOCKHAM
SUSAN W. RABON JAMES G. PATTERSON
TONOLA D. BROWN-BLAND
430 North Salisbury Street Raleigh, North Carolina 27603
Telephone: (919) 733-4249
Facsimile: (919) 733-7300
September 20, 2013
Mr. Timothy Dale
Fiscal Research Division
North Carolina General Assembly
State Legislative Office Building
Raleigh, North Carolina 27601-1030
Dear Mr. Dale:
The Utilities Commission hereby presents an electronic copy of its 2013 Report
to the Joint Legislative Commission on Governmental Operations regarding the status
of telecommunications service in a changing competitive environment.
The report is being provided pursuant to Section 6.1 of House Bill 161
(Chapter 27 of the 1995 Session Laws) requiring that “[O]n October 1, 1997, and every
two years thereafter, the Utilities Commission and the Public Staff shall each provide a
report to the Joint Legislative Utility Review Committee [now the Joint Legislative
Commission on Governmental Operations] summarizing the procedures conducted
pursuant to the provisions of this act during the preceding two years ending on July 1
immediately preceding the report date.” Section 6.1 also directs the reports to
recommend whether the provisions of House Bill 161 “should be continued, repealed, or
amended.” As noted in Part VIII of the Report, the Commission is proposing that the
General Assembly repeal Section 6.1 of House Bill 161, but recommends that all of the
other provisions of House Bill 161 remain in place, without amendment.
Thank you for your assistance.
Respectfully submitted,
Edward S. Finley, Jr.
Chairman
ESFjr/bcp
cc: Christopher Ayers, Executive Director, Public Staff
The Honorable Roy A. Cooper, Attorney General
TABLE OF CONTENTS
PART
Page
Letter of Transmittal
I. Introduction 1
II. Regulation of Incumbent Local Exchange Companies 2
III. Arbitrations and Interconnection Agreements 5
IV. Competing Local Provider Certifications 6
V. Quality of Service 6
VI. Numbering 9
VII. Intrastate Switched Access Charges 10
VIII. Recommendations 12
IX. Appendices:
Appendix A: Website Service Quality Report for the 12 Months Ended
June 30, 2013
i
1
PART I.
INTRODUCTION
On April 6, 1995, the General Assembly ratified House Bill 161 (HB 161).
Section 6.1 of HB 161 provides that:
On October 1, 1997, and every two years thereafter, the Utilities
Commission and the Public Staff shall each provide a report to the Joint
Legislative Utility Review Committee [now the Joint Legislative
Commission on Governmental Operations] summarizing the procedures
conducted pursuant to the provisions of this act during the preceding two
years ending on July 1 immediately preceding the report date. The
reports shall recommend whether the provisions of this act should be
continued, repealed, or amended.
This Report has been prepared and is being submitted in compliance with this
Section.
As with previous Reports, the North Carolina Utilities Commission (Utilities
Commission or Commission) has not confined this Report to matters arising out of North
Carolina’s HB 161 alone but has addressed certain matters arising out of federal
regulation pursuant to the Telecommunications Act of 1996 (TA96). This is necessary
in order to gain a complete perspective on the ongoing evolution in telecommunications
regulation.
It has now been more than 18 years since the passage of HB 161, and the
regulatory environment in which the Utilities Commission operates in
telecommunications has evolved considerably. In addition to intramodal landline
competition from competing local providers (CLPs), incumbent local exchange
companies (ILECs) under our jurisdiction face intermodal competition from wireless
providers, cable providers, and voice over Internet Protocol (VoIP) providers. TA96
vests in the Commission authority to conduct arbitrations with respect to disputed terms
and conditions in interconnection agreements and to approve those that have been
negotiated; but the Federal Communications Commission (FCC) is empowered to
promulgate the general framework in which those arbitrations and many other
telecommunications matters take place. Because of provisions in federal and/or state
law, the Commission does not regulate wireless service, cable television, long distance
service, or broadband service, reflecting a movement toward greater reliance on market
forces.
Finally, after submitting these telecommunications reports over the past decade
and a half, the Commission believes it is time to reconsider the usefulness of this
requirement and to consider abolishing the biennial reporting requirement as outlined in
Section 6.1. The last decade and a half have been transformative in the
telecommunications industry and there has been a corresponding transformation in the
2
kind and degree of regulation of that sector that the General Assembly has authorized.
The new model for regulation has been universally in the direction of more reliance on
market forces and less on traditional forms of regulation. This approach has generally
worked well for both providers and their customers. Accordingly, the Commission
believes that a biennial report to the General Assembly is no longer necessary. The
Commission is respectfully proposing that the General Assembly rescind Section 6.1.
PART II.
REGULATION OF INCUMBENT LOCAL EXCHANGE COMPANIES
There are currently 16 incumbent local exchange companies, or ILECs, in North
Carolina1. Each ILEC, by its choice, is regulated based on one of four different types of
regulation: (1) a price regulation plan; (2) rate-of-return; (3) Subsection (h) of
G.S. §62-133.5; or (4) Subsection (m) of G.S. §62-133.5.
Price Plan Regulation
Currently, four regulated ILECs in North Carolina operate under a
Commission-approved Price Regulation Plan, including: Barnardsville Telephone
Company (Barnardsville), Citizens Telephone Company, d/b/a Comporium
(Comporium), Saluda Mountain Telephone Company (Saluda Mountain), and Service
Telephone Company (Service).
All four Commission-approved price regulation plans contain a section which
institutes a self-enforcing penalties mechanism wherein a company’s yearly average
statewide service results must meet ten service quality objectives to avoid the
imposition of monetary penalties.
1 The Commission notes that on September 2, 2011, Randolph Telephone Company filed a
Petition for Authority to Discontinue the Provision of Service in North Carolina. Randolph Telephone
Company stated in its Petition that it was seeking authorization from the Commission to transfer all of
Randolph Telephone Company’s assets to its parent, Randolph Telephone Membership Corporation.
Randolph Telephone Company noted that, as of July 31, 2011, Randolph Telephone Company served
3,575 access lines in its only exchange located in Liberty, North Carolina. Randolph Telephone
Company affected the transfer as of December 31, 2011. Therefore, Randolph Telephone Company is
no longer an ILEC in North Carolina and is not subject to regulation by the North Carolina Utilities
Commission.
3
Further, the following chart summarizes the pricing constraints for basic local
residential and business exchange service in each of the four price regulation plans:
Company
Basic
Residential
Service
Basket
Pricing Rules For
Basic
Residential Service2
Basic Business
Service Basket
Pricing Rules For
Basic Business
Service2
Barnardsville Moderate 1.5 x inflation / 10% Moderate 1.5 x inflation / 10%
Comporium Moderate 1.5 x inflation / 10% Moderate 1.5 x inflation / 10%
Saluda Mountain Moderate 1.5 x inflation / 10% Moderate 1.5 x inflation / 10%
Service Moderate 1.5 x inflation / 10% Moderate 1.5 x inflation / 10%
Rate-of-Return Regulation
Two ILECs remain under the traditional form of rate-of-return regulation: Ellerbe
Telephone Company (Ellerbe) and Pineville Telephone Company (Pineville).
Subsection (h) Regulation
Nine ILECs have filed a notice with the Commission that they have elected to be
regulated pursuant to G.S. §62-133.5(h), also known as Subsection (h) regulation, as
follows:
● Verizon South, Inc., d/b/a Verizon North Carolina (Verizon)3 filed its
Subsection (h) notice for its Knotts Island exchange on July 21, 2010 (See
Docket No. P-19, Sub 277M).
● Frontier Communications of the Carolinas, Inc. (Frontier)3 filed its
Subsection (h) notice on January 30, 2012 (See Docket No. P-1488, Sub 1A).
● Carolina Telephone and Telegraph Company, LLC d/b/a CenturyLink
(CenturyLink) filed its Subsection (h) notice on March 8, 2012 (See Docket
No. P-7, Sub 825M).
● Central Telephone Company d/b/a CenturyLink (CenturyLink) filed its
Subsection (h) notice on March 8, 2012 (See Docket No. P-10, Sub 479N).
2 Price increases are limited annually, in the aggregate, as presented first in the chart. Price
increases for individual rate elements are limited as presented secondly in the chart.
3 On May 13, 2009, Verizon Communications Inc. (Verizon) and Frontier Communications
Corporation (Frontier) announced an agreement involving a series of transactions which resulted in the
transfer of control of substantially all of the local exchange operations of Verizon South Inc. (Verizon
South), a subsidiary of Verizon, in North Carolina to Frontier. By Commission Order dated
November 30, 2009, Frontier was designated as the ILEC for the study area of Verizon South, other than
the Knotts Island exchange. Further, Frontier was allowed to adopt the price regulation plan of Verizon
South, except as to the Knotts Island exchange.
4
● Mebtel, Inc. d/b/a CenturyLink (Mebtel) filed its Subsection (h) notice on
March 8, 2012 (See Docket No. P-35, Sub 96I).
● Windstream Concord Telephone, Inc. (Windstream Concord) filed its
Subsection (h) notice on July 26, 2012 (See Docket No. P-16, Sub 181L).
● Windstream Lexcom Communications, Inc. (Windstream Lexcom) filed its
Subsection (h) notice on July 26, 2012 (See Docket No. P-31, Sub 145C).
● Windstream North Carolina, LLC (Windstream) filed its Subsection (h) notice
on July 26, 2012 (See Docket No. P-118, Sub 86L).
● North State Telephone Company d/b/a North State Communications (North
State) filed its Subsection (h) notice on November 30, 2012 (See Docket No.
P-42, Sub 137F).
Under Subsection (h) regulation, the Commission cannot regulate the terms,
conditions, rates, or availability of a carrier’s intrastate retail services; however, the
carrier must continue to offer stand-alone basic residential lines to all customers who
choose to subscribe to that service and the rate for that service cannot increase by
more than the percentage increase for the prior year in the GDP-PI.
Additionally, the Commission maintains regulatory authority over several issues of
a Subsection (h) carrier including authority over: (1) arbitration proceedings; (2) the
rates, terms, and conditions for unbundled network elements; (3) enforcement of
interconnection agreements; (4) enforcement of federal requirements relating to
marketing activities; (5) the telecommunications relay service; (6) the Lifeline and
Link-Up4 programs; (7) universal service funds; (8) carrier of last resort obligations;
(9) the management of numbering resources; (10) switched access and intercarrier
compensation; and (11) the rates, terms, and conditions of wholesale services.
Subsection (m) Regulation
To date, only one carrier has filed a notice of election to be regulated pursuant to
G.S. §62.133.5(m), also known as Subsection (m) regulation. BellSouth
Telecommunications, Inc. d/b/a AT&T North Carolina, Inc. (AT&T North Carolina) filed
its Subsection (m) notice on October 14, 2011 (See Docket No. P-55, Sub 1013M).
AT&T North Carolina had previously filed a Subsection (h) notice on October 5, 2009
(See Docket No. P-55, Sub 1013M) and was regulated as a Subsection (h) carrier
between October 5, 2009 and October 13, 2011.
4 Effective April 2, 2012, the FCC eliminated the Link-Up program except for consumers located
on tribal lands.
5
Below is a summary of the current regulatory status of the 16 ILECs in the State:
Company Name Type of Regulation Docket Number
AT&T North Carolina Subsection (m) P-55, Sub 1013M
Barnardsville Price Regulation Plan P-75, Sub 63
Centurylink (Carolina) Subsection (h) P-7, Sub 825M
Centurylink (Central) Subsection (h) P-10, Sub 479N
Comporium Price Regulation Plan P-12, Sub 111
Windstream Concord Subsection (h) P-16, Sub 181L
Ellerbe Rate-of-Return Not Applicable
Frontier Subsection (h) P-1488, Sub 1A
Windstream Lexcom Subsection (h) P-31, Sub 145C
Mebtel Subsection (h) P-35, Sub 96I
North State Subsection (h) P-42, Sub 137F
Pineville Rate-of-Return Not Applicable
Saluda Mountain Price Regulation Plan P-76, Sub 53
Service Price Regulation Plan P-60, Sub 73
Verizon (Knotts Island) Subsection (h) P-19, Sub 277M
Windstream Subsection (h) P-118, Sub 86L
PART III.
ARBITRATIONS AND INTERCONNECTION AGREEMENTS
G.S. §62-110(f1), in pertinent part, authorizes the Utilities Commission to adopt
rules it finds necessary as follows:
(1) To provide for the reasonable interconnection of facilities between all
providers of telecommunications services;
(2) To determine, when necessary, the rates for such interconnection;
(3) To provide for the reasonable unbundling of essential facilities where
technically and economically feasible; and
(4) To provide for the transfer of telephone numbers between providers in a
manner that is technically and economically reasonable.
In addition, Section 251 of TA96 establishes various duties related to
interconnection. Section 252 sets out the process for the approval of negotiated
interconnection agreements and arbitrations for disputed interconnection agreements.
Since 1996, the following negotiation and arbitration results have been achieved:
 1,342 negotiated interconnection agreements between companies have
been approved by the Commission as of July 31, 2013 (not including
amendments to existing interconnection agreements); and
6
● 31 petitions for arbitration have been decided by the Commission with the
issuance of a Recommended Arbitration Order.
PART IV.
COMPETING LOCAL PROVIDER CERTIFICATIONS
On July 19, 1995, the Utilities Commission issued an Order in Docket No. P-100,
Sub 133 promulgating interim rules for certification and regulation of competing local
providers (CLPs) and posing questions for comments on the appropriate regulatory
structure for CLPs, resale of local service, and interconnection. After a round of
comments and reply comments from interested parties, the Commission adopted a
revised and expanded set of provisions as Commission Rules R17-1 through R17-5, on
February 23, 1996. These rules establish the basis on which CLPs are regulated.
These include a detailed list of items to be considered in the application of a prospective
provider for local exchange and exchange access authority and specific requirements
on such things as billing and customer notice.
The Commission has since streamlined the certification process. During the
certification process, the Public Staff analyzes the application to determine and assure
that the applicant is qualified to provide service to the public and that it demonstrates an
understanding of the provisions contained in Commission Rules R17-1 through R17-8.
When the application has been sufficiently perfected, the Public Staff will so advise the
Commission and the Commission will generally issue a certificate without a hearing.
However, the Commission retains the option to hold a hearing should the application
raise concerns which may adversely affect the public interest.
As of July 1, 2013, there were 174 certified CLPs. Further, based on data
published in March 2011 by the FCC5, CLPs served 1,324,0006 switched access lines in
the state as of June 30, 2010. As of that same date, ILECs served 2,850,160 access
lines in the state.
PART V.
QUALITY OF SERVICE
A. Service Quality Standards – Retail
Docket No. P-100, Sub 99
5 The March 2011 Report is the most recent Local Competition Report released by the FCC.
6 176,000 lines were provided via resale, 201,000 lines were provided via unbundled network
elements, 126,000 lines were provided via CLP-owned local loops, and 821,000 lines were provided via
VoIP subscriptions.
7
Commission Rule R9-8: Companies are required to file quarterly reports with the
Commission which detail monthly results on certain service quality measures as
outlined in Commission Rule R9-8.
Subsection (h) ILECs and CLPs and Subsection (m) ILECs and CLPs are not required
to adhere to Rule R9-8.
Website Posting of Service Quality Results: On June 3, 2005, the Commission
ordered website posting on the Commission’s website of service quality results which
are updated quarterly and reflect a 12-month average of results. The results for each
specific service quality measure are presented in a pass/fail format. The current report,
reflecting the 12 months ended June 30, 2013, can be found at
www.ncuc.net/consumer/svcqlty.pdf. A copy of the most current report is attached
hereto as Appendix A.
B. Service Quality Standards – Wholesale
Docket No. P-100, Sub 133k
The Commission has adopted service quality measurement plans for AT&T North
Carolina, Carolina, Central, and Frontier7 (formerly Verizon South, Inc.) to respond to
the enactment of TA96 which required ILECs to provide nondiscriminatory wholesale
access to CLPs and their retail customers.
Frontier, Carolina, and Central continue to operate under a stipulated interim
performance measurement plan approved by the Commission on April 13, 2000.
The Commission originally adopted a Service Quality Measurements (SQM) Plan
and Self-Effectuating Enforcement Mechanism (SEEM) Plan effective August 1, 2003
for AT&T North Carolina. In 2005, AT&T North Carolina and a group of CLPs filed a
new, stipulated SQM and SEEM Plans for AT&T North Carolina. The Commission
approved the stipulation by Order dated October 24, 2005. AT&T North Carolina’s new
SQM and SEEM Plans became effective on January 1, 2006.
Further, AT&T North Carolina has implemented various new interfaces and
system changes in recent years which have necessitated updates to the SQM and
SEEM Plans. These updates have been reflected in revised versions of the SQM and
SEEM Plans with effective dates of: July 18, 2009; November 14, 2009; April 15, 2010;
July 3, 2010; and September 1, 2012.
7 Per Ordering Paragraph No. 7 of the Commission’s November 30, 2009 Order Granting
Certificates and Approving Requests (Docket Nos. P-1488, Subs 0 and 1; P-1489, Sub 1; P-100,
Subs 133c and 133k; P-19, Subs 277 and 537; P-574, Sub 2; and P-517, Sub 2), Frontier “. . .shall adopt
the Performance Measures in effect for Verizon South, pursuant to the April 13, 2000, Order in Docket
No. P-100, Sub 133k, and any subsequent orders for the existing Verizon South study area, other than
the Knotts Island exchange (Docket Nos. P-1488, Sub 1, and P-100, Sub 133k).”
8
On August 31, 2010, AT&T North Carolina filed a Motion to Approve
Modifications to its SQM/SEEM Plans. AT&T North Carolina noted that the proposed
changes would streamline the SQM/SEEM Plans and that AT&T North Carolina was
seeking approval of the proposed SQM/SEEM Plans throughout AT&T’s nine-state
southeast region. The proposed changes to the SQM/SEEM Plans included the
following:
(1) elimination of Tier 2 remedies paid by AT&T North Carolina to the State of
North Carolina;
(2) increases to Tier 1 remedies paid by AT&T North Carolina to CLPs;
(3) other SEEM Plan changes to eliminate several provisions that impose
penalties on performance for activities that have no impact on the level of
service provided to the CLP; and
(4) miscellaneous changes including modifications, additions, and deletions to
the Plans.
The Commission sought comments from interested parties on AT&T North
Carolina’s Motion. By Order dated October 22, 2010, the Commission granted AT&T
North Carolina’s Motion in its entirety. AT&T North Carolina’s modified SQM/SEEM
Plans were effective on January 1, 2011.
In addition, AT&T North Carolina has invoked the force majeure provision of its
SEEM Plan three times in the past few years. Under AT&T North Carolina’s SEEM
Plan, AT&T North Carolina must file a notice of its intent to invoke the force majeure
provision of its SEEM Plan. Competing local providers have ten days to file objections
or concerns on the notice filing. The notice of force majeure is deemed approved by the
Commission effective 30 calendar days after AT&T North Carolina provides the notice.
AT&T North Carolina has filed notices of force majeure for the following time periods:
January 10, 2011 through January 16, 2011; April 17, 2011 through April 30, 2011; and
August 26, 2011 through September 9, 2011. No objections were filed on any of the
notices and all of the notices were deemed approved by the Commission after the
30 days expired.
Finally, it should be noted that, although AT&T North Carolina is a
Subsection (m) company as discussed in Part II of this Report, the Commission
continues to have regulatory authority over the wholesale services provided by AT&T
North Carolina to CLPs.
9
PART VI.
NUMBERING
919/984 Area Code
On March 31, 2012, the 984 area code was placed in-service to meet the
demand for telephone numbering resources for the existing 919 area code located in
and around Raleigh. The 984 area code is the second all-services distributed overlay
approved by the Commission for implementation in the State. The first overlay relief
was the 980 area code implemented in the Charlotte area in 2001. The chief
disadvantage of implementing an all-services distributed overlay is the requirement of
10 digit dialing for local calls.
After the successful implementation of the 984 area code, numerous misdials
occurred when customers dialed 911 rather than 919 when making local calls. The
misdialed calls resulted in numerous follow-up calls from area 911 Public Safety
Answering Point (PSAP) centers to verify if an emergency call had been placed
requiring assistance. The Commission, as well as service providers, responded to the
general public through press releases asking telephone users to remain on the line if
they dialed 911 in error while attempting to complete a local call.
336 Area Code
The 336 area code, which generally provides coverage for the Greensboro -
Winston-Salem - High Point area, is currently projected to exhaust in the second quarter
of 2016.
In 2000, Neustar, in its role as the North American Numbering Plan Administrator
(NANPA), filed a petition requesting that the Commission approve the Industry’s
recommended all-services distributed overlay for relief of the 336 area code. At the
time Neustar filed the petition, the 336 area code was projected to exhaust by the fourth
quarter of 2002. However, with the implementation of Thousands Block Number
Pooling and other conservation measures, the relief planning was suspended. Neustar
has recently notified the Commission that the 336 area code is currently projected to
exhaust in the second quarter of 2016. The 2000 petition is pending before the
Commission.
Requests for “Safety Valve” Relief
In the FCC’s Third Report and Order and Second Order On Reconsideration in
CC Docket No. 96-98 and Docket No. 99-200, issued on December 28, 2001, the FCC
delegated authority to state commissions to hear claims that a “safety valve” should be
applied when the NANPA or Pooling Administrator (PA) denies a carrier’s specific
request for numbering resources. FCC rules state that a service provider must be
within six months of exhaust of its numbering resources and have achieved a
10
75 percent utilization of its numbering resources in a specified market area (i.e., rate
center) before Neustar may grant additional numbering resources. Under the “safety
valve” mechanism, a carrier may file a petition with the Commission requesting that the
Commission overturn Neustar’s denial of numbering resources. The Commission has
granted numbering resources through “safety valve” relief 33 times during the past two
years. Generally, the demand for “safety valve” relief is driven by a business client’s
internal telecommunications network or special numbering resources formatting
requirements.
The deployment of packet switching technology by service providers represents
a new dimension of “safety valve” relief. Service providers must establish a Local
Routing Number (LRN) for each new packet switch which is specific to a particular
location for identification within the North American Numbering Plan for call initialization
and completion between customers. The FCC’s December 28, 2001 Order also
delegated authority to state commissions to review Neustar denials for LRNs, as
necessary. Frontier Communications of the Carolinas, Inc., Windstream Concord, and
Windstream North Carolina, LLC have filed petitions with the Commission for additional
numbering resources in instances where Neustar has denied requests for LRNs. The
Commission has granted each of these petitions. The growing use of packet switching,
which is driven by various broadband deployment initiatives, will increase demand for
numbering resources across the State.
PART VII.
INTRASTATE SWITCHED ACCESS CHARGES
A long distance provider must pay a local exchange company (LEC) intrastate
switched access charges to transport the portion of an intrastate long distance call that
begins or terminates on the LEC’s facilities. On November 23, 2009, Sprint
Communications Company, L.P., Sprint Spectrum, L.P., and Nextel South Corp.
(collectively Sprint) filed a Petition to Reduce Switched Access Rates charged by local
exchange companies in North Carolina on an intrastate basis, arguing that those rates
are too high and should be reduced. The Commission solicited comments on Sprint’s
Petition in Docket No. P-100, Sub 167 (the Access Charge Reform Docket) from
interested parties and, on April 14, 2010, established an Access Charges Working
Group (ACWG) made up of interested companies and the Public Staff to further
examine in greater detail the issues involved in intrastate access charge reform,
including the impact on universal service funding. Switched access charges have
traditionally provided an implicit subsidy used by carriers to ensure universal service.
The ACWG Report revealed widely divergent views on whether switched access
charges should be reformed and, if so, how access charges should be amended. The
parties to the ACWG suggested that the Commission schedule an evidentiary hearing.
The Commission agreed, and, on June 3, 2011, scheduled a hearing to begin on
October 18, 2011. The hearing began as scheduled.
11
On November 18, 2011, the FCC released its Report and Order and Further
Notice of Proposed Rulemaking (FCC 11-161, WC Docket No. 10-90) which is known
as the Universal Service Fund (USF) / Intercarrier Compensation (ICC) Transformation
Order. The USF/ICC Transformation Order provides a comprehensive, uniform, national
bill-and-keep framework as the ultimate end state for all telecommunications traffic
exchanged with a LEC.
By Order dated December 7, 2011, the Commission requested that the parties
file initial and reply comments on the impact of the FCC’s USF/ICC Transformation
Order on the Access Charge Reform Docket.
Initial comments were filed on March 15, 2012 by AT&T North Carolina and the
North Carolina Telephone Membership Corporations (TMCs)8, the Competitive Carriers
of the South Inc. (CompSouth) and the North Carolina Cable Telecommunications
Association (NCCTA), the ILEC Group9, the Public Staff, Sprint, and MCImetro Access
Transmission Services, LLC d/b/a Verizon Access Transmission Services, MCI
Communications Services, Inc. d/b/a Verizon Business Services and Cellco Partnership
and Verizon Wireless (Verizon).
Reply comments were filed on April 16, 2012 by AT&T North Carolina and the
North Carolina TMCs, CompSouth and the NCCTA, the ILEC Group, Sprint, and
Verizon.
On July 10, 2012, the Commission issued its Order Holding Docket in Abeyance
Pending Further Commission Order. In its Order, the Commission concluded it was
appropriate to hold the proceeding in abeyance pending action by the FCC on the
Further Notice of Proposed Rulemaking, the outcome of various Federal Court appeals,
and the decisions on reconsideration requests before the FCC. The Commission
asserted that by holding the docket open, the Commission could safeguard the valuable
and extensive evidentiary record already compiled in the docket for possible later use.
The Commission further concluded that it was premature to take any action on
the issue of originating intrastate access charges at that point in time. The Commission
stated that it would continue to monitor the myriad of pending issues stemming from the
FCC’s USF/ICC Transformation Order including motions for reconsideration before the
8 The TMCs include Atlantic Telephone Membership Corporation, Randolph Telephone
Membership Corporation, Skyline Telephone Membership Corporation, Star Telephone Membership
Corporation, Surry Telephone Membership Corporation, Tri-County Telephone Membership Corporation,
Wilkes Telephone Membership Corporation, and The Yadkin Valley Telephone Membership Corporation.
9 For purposes of the comments, the ILEC Group included Citizens Telephone Company d/b/a
Comporium, Ellerbe Telephone Company, North State Telephone Company d/b/a North State
Communications, Barnardsville Telephone Company, Saluda Mountain Telephone Company, Service
Telephone Company, Town of Pineville d/b/a Pineville Telephone Company, Frontier Communications of
the Carolinas, Inc., Carolina Telephone and Telegraph Company, LLC d/b/a CenturyLink, Central
Telephone Company d/b/a CenturyLink, MebTel, Inc. d/b/a CenturyLink, Windstream Concord
Telephone, Inc., Windstream Lexcom Communications, Inc., and Windstream North Carolina, LLC.
12
FCC, the federal court cases, and the FCC’s decision resulting from the Further Notice
of Proposed Rulemaking.
The Commission concluded that it would continue to monitor the FCC’s actions
on the issue of the appropriate transition for originating intrastate access charges to the
bill-and-keep pricing methodology and would initiate, either on its own accord or in
response to a motion, any further proceedings or actions necessary once the FCC
released its decision on the issue. In addition, there are several cases pending in the
federal courts on the USF/ICC Transformation Order and pending motions for
reconsideration before the FCC. Resolution of these outstanding appeals and motions
may require further action by the Commission in the docket.
PART VIII.
RECOMMENDATIONS
Section 6.1 of HB 161 requests the Utilities Commission to recommend in each
of its Reports “whether the provisions of this act should be continued, repealed, or
amended.” The Utilities Commission recommends that all of the provisions of House
Bill 161 with the exception of Section 6.1 continue without amendment.
However, as noted in the Introduction, the Commission respectfully proposes that
the General Assembly repeal Section 6.1 of HB 161 so that the Commission will no
longer be required to submit a biennial report concerning telecommunications to the
Joint Legislative Commission on Governmental Operations.
PART IX.
APPENDICES
Appendix A: Website Service Quality Report for the 12 Months Ended
June 30, 2013
APPENDIX A
PAGE 1 of 6
Operator
"0"
Directory
Assistanc
e
Business
Of f ice
Repair
Service
Initial
Customer
Trouble
Reports
Out-of -Service
Troubles
Cleared w ithin
24 Hours
Regular Service
Orders Completed
w ithin 5 Working
Days
New Service
Installation
Appointments Not Met
for Company Reasons
New Service
Held Orders Not
Completed w ithin
30 Days
@ Communications, Inc. N/A N/A ✔ ✔ N/A N/A N/A N/A N/A
Access Point, Inc. DNR DNR ✘ ✘ N/A N/A N/A N/A N/A
ACN Communications Services, Inc. N/A N/A ✘ ✘ N/A ✘ N/A N/A N/A
Airspring, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
All American Telecom, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Alternative Phone, Inc. N/A N/A ✔ ✔ ✔ N/A ✔ ✔ ✔
Atlantic Telecom Multi. Con., LLC N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
Barnardsville Telephone Company N/A N/A ✔ ✘ ✔ ✔ ✔ ✔ ✔
BCN Telecom, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Big River Telephone Company, LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
Birch Communications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Birch Telecom of the South, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Broadvox-CLEC <12 <12 <12 <12 <12 <12 <12 <12 <12
Budget PrePay, Inc. N/A N/A N/A N/A DNR DNR DNR ✔ ✔
BullsEye Telecom, Inc. DNR DNR ✔ ✔ ✔ DNR DNR DNR DNR
Business Telecom, Inc. ✔ ✔ ✘ ✘ N/A N/A ✘ N/A N/A
Capital Communications Consultants, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Cebridge Telecom NC, LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
Charter Fiberlink NC - CCO, LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
Cincinnati Bell Any Distance, Inc. N/A N/A N/A N/A N/A N/A N/A N/A N/A
Citizens Telephone Company N/A N/A ✔ ✔ ✔ ✘ ✔ ✔ ✔
Common Point, LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
ComTech21, LLC N/A N/A DNR DNR ✔ ✔ ✔ ✔ ✔
Crown Castle NG East, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Cypress Comm. Operating Co., LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
DeltaCom, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Dialog Telecommunications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Ellerbe Telephone Company N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
KEY TO SYMBOLS USED IN THIS TABLE
✔ The company's average statewide performance met the objective during the report period. <12 Results were reported for fewer than 12 months; however, no waiver was requested from
✘ The company's average statewide performance failed to meet the objective during the report period. the Commissio n.
N/A The company reported that the results for this objective were not within its control. This typically means that DNR The reported data for this objective for one or more months were inconsistent with Rule R9-8
another company provided the associated service. and Commissio n orders in Docket No. P-100, Sub 99, rendering the data unusable.
<12
<12
<12
✔
✔
<12
DNR
N/A
<12
<12
N/A
<12
Service Quality Report
Period Covered: July 1, 2012 - June 30, 2013
REPORTING
COMPANY
ANSWERTIMES TROUBLE REPORTS, SERVICE ORDERS, AND CUSTOMER APPOINTMENTS
Repeat
Customer
Trouble
Reports
✔
<12
N/A
<12
<12
<12
N/A
✔
✔
N/A
<12
<12
DNR
✔
<12
<12
APPENDIX A
PAGE 2 of 6
Operator
"0"
Directory
Assistanc
e
Business
Of f ice
Repair
Service
Initial
Customer
Trouble
Reports
Out-of -Service
Troubles
Cleared w ithin
24 Hours
Regular Service
Orders Completed
w ithin 5 Working
Days
New Service
Installation
Appointments Not Met
for Company Reasons
New Service
Held Orders Not
Completed w ithin
30 Days
Entelegent Solutions, Inc. N/A N/A ✔ ✔ N/A N/A N/A N/A N/A
Ernest Communications, Inc. ✔ ✔ ✔ ✔ ✔ ✘ ✔ ✔ ✔
EveryCall Communications, Inc. N/A N/A ✔ ✔ ✔ N/A N/A ✔ ✔
Fast Phones, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Fidelity Comm. Services III, Inc. N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
Flatel, Inc. N/A N/A ✔ ✔ N/A N/A N/A N/A N/A
France Telecom Corp. Solutions L.L.C. N/A N/A N/A N/A N/A N/A N/A N/A N/A
FRC, LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
Global Connection, Inc. of America N/A N/A ✘ ✘ ✔ ✔ ✔ N/A N/A
Global Crossing Local Services, Inc. N/A N/A ✘ ✘ ✔ DNR N/A N/A N/A
Granite Telecommunications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
IDT America, Corp. <12 <12 <12 <12 <12 <12 <12 <12 <12
Image Access, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
iNETWORKS Group, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Infotelecom, LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
Interlink Telecommunications, Inc. N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
Legacy Long Distance International, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Lightyear Network Solutions, LLC ✔ ✔ ✔ ✔ ✔ N/A N/A N/A N/A
Linkup Telecom, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
LTS of Rocky Mount, LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
Matrix Telecom, Inc. N/A N/A DNR DNR ✔ ✘ DNR ✔ ✔
MCC Telephony of the South <12 <12 <12 <12 <12 <12 <12 <12 <12
McGraw Communications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
MCImetro Access Trans. Services, LLC ✘ ✘ ✘ ✔ N/A N/A N/A N/A N/A
Metropolitan Tel. of N. C., Inc. N/A N/A ✔ ✔ N/A N/A N/A N/A N/A
Mitel NetSolutions, Inc. N/A N/A N/A N/A ✔ DNR DNR ✔ ✔
Mobilitie, LLC <12 <12 <12 <12 <12 <12 <12 <12 <12
Momentum Telecom, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
KEY TO SYMBOLS The company 'Us SaEveDr aIgNe TstHaIteSw TidAeB pLeErformance met the objective during the report period.
✔ The company's average statewide performance failed to meet the objective during the report period. <12 Results were reported for fewer than 12 months; however, no waiver was requested from
✘ The company reported that the results for this objective were not within its control. This typically means that
the Commissio n.
N/A another company provided the associated service. DNR The reported data for this objective for one or more months were inconsistent with Rule R9-8
and Commissio n orders in Docket No. P-100, Sub 99, rendering the data unusable.
<12
<12
<12
<12
N/A
✔
<12
<12
✔
<12
Service Quality Report
Period Covered: July 1, 2012 - June 30, 2013
✔
REPORTING
COMPANY
ANSWERTIMES TROUBLE REPORTS, SERVICE ORDERS, AND CUSTOMER APPOINTMENTS
Repeat
Customer
Trouble
Reports
N/A
<12
✔
<12
N/A
✔
✔
<12
<12
<12
N/A
✔
N/A
✔
<12
✔
<12
APPENDIX A
PAGE 3 of 6
Operator
"0"
Directory
Assistanc
e
Business
Of f ice
Repair
Service
Initial
Customer
Trouble
Reports
Out-of -Service
Troubles
Cleared w ithin
24 Hours
Regular Service
Orders Completed
w ithin 5 Working
Days
New Service
Installation
Appointments Not Met
for Company Reasons
New Service
Held Orders Not
Completed w ithin
30 Days
NET TALK.com, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
New East Telephony, Inc. N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
New Horizons Communications, Corp. <12 <12 <12 <12 <12 <12 <12 <12 <12
NOS Communications, Inc. ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
One Voice Communications, Inc. ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
OneTone Telecom, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
PaeTec Communications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Piedmont Communications Services, Inc. N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
Pineville Telephone Company N/A N/A ✔ ✔ DNR ✔ ✔ ✔ ✔
PNG Telecommunications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Preferred Long Distance, Inc. N/A N/A ✔ ✔ ✔ ✔ ✘ ✔ ✔
QuantumShift Communications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Ready Telecom, Inc. N/A N/A ✔ ✔ N/A N/A N/A N/A ✔
Saluda Mountain Telephone Company N/A N/A ✔ ✘ ✘ ✔ ✔ ✔ ✔
School Link, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Service Telephone Company N/A N/A ✔ ✘ ✔ ✔ ✘ ✔ ✔
SkyBest Communications, Inc. N/A N/A ✔ ✘ ✔ ✔ ✘ ✔ ✔
South Carolina Net, Inc. N/A N/A N/A ✔ ✔ ✔ DNR ✔ ✔
Spectrotel, Inc. ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
Springboard Telecom, Inc. N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
Talk America, Inc. N/A N/A ✔ ✔ ✔ N/A N/A N/A N/A
TDPC, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Telco Experts, Inc. ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
TelCove Operations, Inc. ✔ ✔ ✔ ✔ N/A ✔ DNR N/A N/A
Tele Circuit Network Corporation ✔ ✔ ✔ ✔ N/A N/A N/A N/A N/A
Teledias Communications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
The Other Phone Company N/A N/A ✔ ✔ ✔ N/A N/A N/A N/A
Town of Pineville N/A N/A ✔ ✔ DNR ✔ ✔ ✔ ✔
KEY TO SYMBOLS USED IN THIS TABLE
✔ The company's average statewide performance met the objective during the report period. <12 Results were reported for fewer than 12 months; however, no waiver was requested from
✘ The company's average statewide performance failed to meet the objective during the report period. the Commissio n.
N/A The company reported that the results for this objective were not within its control. This typically means that DNR The reported data for this objective for one or more months were inconsistent with Rule R9-8
another company provided the associated service. and Commissio n orders in Docket No. P-100, Sub 99, rendering the data unusable.
✔
✔
<12
N/A
<12
✔
<12
✔
<12
✔
Service Quality Report
Period Covered: July 1, 2012 - June 30, 2013
REPORTING
COMPANY
ANSWERTIMES TROUBLE REPORTS, SERVICE ORDERS, AND CUSTOMER APPOINTMENTS
Repeat
Customer
Trouble
Reports
<12
✔
✔
✔
✔
<12
<12
✔
✔
✔
✔
<12
✔
DNR
<12
✔
N/A
N/A
APPENDIX A
PAGE 4 of 6
Operator
"0"
Directory
Assistanc
e
Business
Of f ice
Repair
Service
Initial
Customer
Trouble
Reports
Out-of -Service
Troubles
Cleared w ithin
24 Hours
Regular Service
Orders Completed
w ithin 5 Working
Days
New Service
Installation
Appointments Not Met
for Company Reasons
New Service
Held Orders Not
Completed w ithin
30 Days
Trans National Comm. Int., Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
UNICOM Communications, LLC N/A N/A ✔ N/A ✔ ✔ ✔ ✔ ✔
Unity Telecom, LLC ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
US LEC of North Carolina, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Velocity The Greatest Phone Company Ever, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Victory Communications, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Wave Telecom, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Wilkes Communications, Inc. N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
WiMacTel, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Windstream Communications, Inc. ✔ ✔ DNR DNR ✔ ✘ ✔ ✔ ✔
Windstream Nuvox, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
XO Communications Services, Inc. <12 <12 <12 <12 <12 <12 <12 <12 <12
Yadkin Valley Telecom, Inc. N/A N/A ✔ ✔ ✔ ✔ ✔ ✔ ✔
KEY TO SYMBOLS USED IN THIS TABLE
✔ The company's average statewide performance met the objective during the report period. <12 Results were reported for fewer than 12 months; however, no waiver was requested from
✘ The company's average statewide performance failed to meet the objective during the report period. the Commissio n.
N/A The company reported that the results for this objective were not within its control. This typically means that DNR The reported data for this objective for one or more months were inconsistent with Rule R9-8
another company provided the associated service. and Commissio n orders in Docket No. P-100, Sub 99, rendering the data unusable.
<12
<12
✔
✔
✔
<12
<12
✔
<12
<12
<12
<12
✔
Service Quality Report
Period Covered: July 1, 2012 - June 30, 2013
REPORTING
COMPANY
ANSWERTIMES TROUBLE REPORTS, SERVICE ORDERS, AND CUSTOMER APPOINTMENTS
Repeat
Customer
Trouble
Reports
APPENDIX A
PAGE 5 of 6
Access Communications, Inc. G C Pivotal, LLC Reliance Globalcom Services, Inc.
Access Fiber Group, Inc. Hotwire Communications, Ltd. RidgeLink, LLC
ALEC, Inc. Hypercube Telecom, LLC Sage Telecom Communications, LLC
ATC Outdoor DAS, LLC inContact d/b/a UCN Sage Telecom, Inc.
BalsamWest FiberNET, LLC IntelePeer, Inc. SCANA communications, Inc.
Bandwidth.com CLEC, LLC Intelletrace, Inc. Sprint Communications Company, L.P.
BellSouth Long Distance, Inc. Intellicall Operator Services, Inc. Star Wireless, Inc.
Better World Telecom, LLC Intellifiber Networks, Inc. Sunesys, LLC
Broadplex, LLC Intrado Communications, Inc. Sungard Network Solutions, Inc.
Broadview Networks, Inc. IPC Network Services, Inc. Synergem Technologies, Inc.
BT Communications Sales LLC Level 3 Communications, L.L.C. Time Warner Cable Information Services (N. C.), LLC
Buggs Island Telephone Cooperative LMK Communications, LLC Touchtone Communcations Inc.
Cbeyond Communications, LLC MegaPath Corporation tw telecom of north carolina l.p.
Celito CLEC, LLC Network Innovations, Inc. Verizon Select Services, Inc.
CND Acquisition Corporation Network Telephone Corporation Wholesale Carrier Services, Inc.
Cox North Carolina Telecom, LLC Neutral Tandem - North Carolina, LLC Windstream KDL, Inc.
Crexendo Business Solutions, Inc. NextGen Communications, Inc. Windstream Norlight, Inc.
Custom Teleconnect, Inc. Nexus Communications, Inc. Windstream NTI, Inc.
DukeNet Communications, LLC North American Local, LLC Ymax Communications Corp.
EarthLink Business, LLC Peerless Network of North Carolina, LLC Zayo Group, LLC
ExteNet Systems, Inc. Port City Multimedia, Inc.
Fiber Technologies Networks, L.L.C. Randolph Telephone Telecommunications, Inc.
The following companies filed letters stating that they either did not provide service in North Carolina or did
not provide basic local residential and/or business exchange service to customers in North Carolina during the
period covered by this report.
APPENDIX A
PAGE 6 of 6
The following companies have not filed a service quality report.
365 Wireless, LLC PhoneAid Communications Corp.
ANPI Business, LLC Sidera Networks, LLC
O1 Communications East, LLC South Carolina Telecommunications Group Holdings LLC
The following companies have opted into Subsection H regulation.
Carolina Telephone and Telegraph Company Rosebud Telephone, LLC
Central Telephone Company Smithville Telecom, LLC
DishNet Wireline, LLC Verizon South, Inc.
Frontier Communications of America, Inc. Windstream Concord Telephone, Inc.
Frontier Communications of the Carolinas, Inc. Windstream Lexcom Communications, Inc.
MebTel, Inc. Windstream North Carolina, LLC
North State Telephone Company
The following companies have opted into Subsection M regulation.
AT&T Corp. Madison River Communications, LLC
BellSouth Telecommunications, LLC North State Communications Advanced Services, LLC
Crosstel Tandem, Inc. Qwest Communications Company, LLC
Embarq Communications, Inc. Teleport Communications America, LLC